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The Ministry of Justice's September bulletin - a tough approach to PPI corroboration

Further to the publication of the Ministry of Justice’s (“MoJ”) annual report on Claims Management Regulation, the MoJ has published a September 2012 edition of the Claims Management Regulation Business Bulletin.

The aim of the Bulletin is to highlight recent developments and provide an update on issues relating to Claims Management Companies (“CMCs”). These include issues arising out of the MoJ’s annual report, its consultation on the Conduct of Authorised Persons Rules and the new powers of the Legal Ombudsman to deal with customer complaints about CMCs, starting in 2013. One issue of particular interest is the MoJ’s comment on the corroboration of PPI claims. The MoJ uses the Bulletin as a further opportunity to underline the importance of CMCs’ obligations to ensure that they corroborate the PPI mis-selling claims submitted to lenders. The MoJ has for many months now been emphasising the fact that CMCs must make sure that their information is consistent throughout the claim process and that what they submit to lenders is what the client has told them. CMCs unable to evidence the fact that the allegations have come from the client will be deemed to be acting irresponsibly.

The fact that the MoJ has used this Bulletin as yet another opportunity to deliver this key message demonstrates the importance it places on CMCs’ obligation to undertake their due diligence and conduct their claims responsibly. Should CMCs fail to take heed of these warnings, the MoJ makes it clear that this will constitute a breach of the Rules and give rise to enforcement action.

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